Bajaj Allianze General Insurance ... vs Shardadevi Rambadai Yadav
2021 Latest Caselaw 17094 Guj

      C/FA/2136/2020                             JUDGMENT DATED: 29/10/2021




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                       R/FIRST APPEAL NO. 2136 of 2020
                                    With
                 CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
                      In R/FIRST APPEAL NO. 2136 of 2020

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

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1     Whether Reporters of Local Papers may be allowed No
      to see the judgment ?

2     To be referred to the Reporter or not ?                   No

3     Whether their Lordships wish to see the fair copy No
      of the judgment ?

4     Whether this case involves a substantial question No
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

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                BAJAJ ALLIANZE GENERAL INSURANCE CO LTD
                                 Versus
                       SHARDADEVI RAMBADAI YADAV
==========================================================
Appearance:
MS KIRTI S PATHAK(9966) for the Appellant(s) No. 1
NISHIT A BHALODI(9597) for the Defendant(s) No. 1,2,3,4
RULE SERVED(64) for the Defendant(s) No. 5,6
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     CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

                             Date : 29/10/2021
                             ORAL JUDGMENT

1. This Court has already admitted the First Appeal vide order dated 27.10.2020. In the Civil Application for stay, this Court vide order dated 12.01.2021 granted conditional stay against execution of impugned judgment and award.

C/FA/2136/2020 JUDGMENT DATED: 29/10/2021

2. Ms Kirti S Pathak, learned Advocate for appellant-Insurance Company has stated that they have deposited Rs 7,86,665/- before the M.A.C. Tribunal, Surat and through the virtual hearing she had prayed for final hearing of the appeal, since the present case lies within the narrow compass, accordingly the matter is taken up for the final hearing.

3. Heard learned Advocate Ms Kirti S Pathak for the appellant and learned Advocate Mr Nishit A Bhalodi for respondent Nos. 1 to 4. Though served none appears for respondent Nos. 5 and 6.

4. Being aggrieved and dissatisfied by the judgment and award dated 11.03.2020 passed by the Motor Accident Claim Tribunal (Auxi.) Surat, in MACP No. 473 of 2011 the appellant-Insurance Company has preferred this First Appeal under Section 173 of the Motor Vehicles Act 1988 ( "the Act" for short).

5. The short question arises for consideration is whether the appellant- Insurance Company can be made liable to pay compensation to the claimants when the driver of offending vehicle was holding a 'Fabricated License' at the relevant time of accident?

6. It is the case of the claimants-respondent Nos. 1 to 4 herein that on unfortunate day i.e. on 20.5.2011 at around 11.45 P.M., when the deceased was resting at the place of incident, at that time, one Truck bearing registration No. GJ-5-AT- 2526 ("offending vehicle"), plied by opponent No.1- respondent No.5 herein motioned in reverse, without any care or caution and in most rash and negligent manner, and hit the deceased, because of which the deceased sustained severe fatal injuries, to which the deceased succumbed. The respondent Nos. 1 to 4- original claimants have

C/FA/2136/2020 JUDGMENT DATED: 29/10/2021

preferred the Claim Petition under Section 166 of the Motor Vehicles Act, 1988, before the Motor Accidents Claims Tribunal, Surat claiming compensation of Rs. 9,00,000/-, from the opponents, on account of the death of deceased Rambadai Yadav due to fatal motor accident, ensuing from the rash and negligent act on the part of respondent No.5 herein. The learned Tribunal vide order dated 11.03.2020 was pleased to allow the claim petition of the claimants and ordered to recover a sum of Rs. 5,27,400/- (Five Lac Twenty Seven Thousand Four Hundred only) with cost and interest at the rate of 7.5% per annum, from the date of claim petition till its realization from the opponents, who are jointly and severally held liable to pay the same to the claimants.

7. Despite the service of summons, respondents No. 5 & 6-original opponent Nos. 1 and 2 did not appear before Tribunal. The appellant- Insurance company had resisted the claim petition whereby it was contended that the driver of vehicle insured with appellant was holding a fabricated license at the time of accident and thereby the driver and owner of the vehicle have committed breach of provisions of Motor Vehicles Act 1988.

8. It is contended on behalf of appellant-Insurance company that the learned Tribunal has materially erred in not properly appreciating the legal issue of 'Fabricated Driving License' raised by appellant during the rigmarole of the trial. The appellant has pointed out before the Tribunal that driver of insured vehicle was not holding valid and effective driving license and license on record is fake license as produced as Driving License No. 12590/07 R.T.O. Rachi vide Exhibit 55 as per which the license was lucidly found fake.

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9. So far as efforts to prove their case of fake license before Tribunal learned Advocate Ms Pathak specifically pointed out that the appellant- Insurance Company had examined Assistant Manager Mr. Ankur Mistry of Bajaj Allianz General Insurance Company vide Exhibit 52, whereby the witness has deposed before the Tribunal that the driving license produced on the record is fabricated, hence it is clear breach of terms and conditions of policy. The appellant had issued witness summons to RTO vide Exhibit

32. The letter written to RTO Rachi vide Exhibit 55 and 59, letter sent to original opponent Nos. 1 and 2 vide Exhibit 56 and postal receipt issued by the department vide Exhibit 57.

10. Learned Advocate for the appellant further submits that the factum of fake driving license was neither rebutted by claimants nor owner- insured. The learned Tribunal should have exonerated the Insurance Company from threshold, since there is a glaring difference of "Name Of The Driver On The Wheels" and "Name Of Driver As Per RTO Verified License". The Appellant points out the name of driver as per the Driving License No. 12590/07 vide Exhibit 55 was "Abhishek Agrawal" whereas at the relevant time of accident respondent No.5 i.e Antavarav Dadorav (Driver of Truck - Original Opponent No. 1) was driving the Truck. She further submits that there is a day- night contrast in the names, since on the License (Exhibit 55) was "Abhishek" and person who was actually driving the Truck was "Antavarav".

11. Learned Advocate for the appellant refers to the proviso of Section 3 read with Section 5 of the Act, and submits that it is the duty of owner to see at the time of accident the driver was holding valid and effective license. Herein the owner should have bothered to see prima facie the "Name Of Driver On The face of Driving License is ABHISHEK AGRAWAL" whereas the vehicle was being driven by Mr. Antavarav

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Dadorav, thus the Insurance Company should have ought to be exonerated at threshold. Section 3 of the Act reads as under :

"3. Necessity for driving licence.-- (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle [other than [a motor cab or motor cycle] hired for his own use or rented under any scheme made under sub-section (2) of section 75] unless his driving licence specifically entitles him so to do.

(2) The conditions subject to which sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government."

12. Learned Advocate for the appellant submits that every owner is under legal obligation to verify the driving license of driver engaged by him. If such license is found to be fake such license is then it amounts to not holding valid and effective driving license resultantly breach of policy terms and conditions. Section 5 of the Act reads as under :

"5. Responsibility of owners of motor vehicles for contravention of sections 3 and 4.--No owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of section 3 or section 4 to drive the vehicle."

13. To support the contentions the learned Advocate for the appellant has relied upon below judgments :

(1) United India Insurance Company Ltd. V/s Sujata Arora and others reported in 2013 ACJ 2129 (SC) wherein the Supreme Court has held as under :

"3. The Claims Tribunal had recorded a categorical finding that the offending van at the relevant point of time was not being driven by a person holding a valid licence. Relevant finding in this

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regard is reproduced herein below:

In view of the above I hold that since the respondent No. 1 - owner entrusted the offending van to the respondent No. 2, who was not holding a valid driving licence at the time of accident, the respondent No. 1 violated the conditions of the insurance policy and, therefore, the Insurance Company is not liable to indemnify the respondent No. 1-owner in accordance with the terms of the policy. As such I hold that the respondent Nos. 1 and 2 only are liable to pay the compensation amount in this case to the petitioners. Accordingly this issue is decided in favour of the petitioners and against the respondent Nos. 1 and 2.

4. In the light of the aforesaid finding the Claims Tribunal in our opinion rightly directed that the amount should be paid by the owner and driver of the vehicle only. No liability was fastened on the Insurance Company as at the relevant point of time, Van was being driven by a person who was not holding a valid driving licence. This certainly amounts to violation of the condition of the Insurance policy.

5.However, learned Single Judge of the High Court proceeded on wrong assumption and held it otherwise giving rise to filing of the present appeal. The findings of learned Single Judge that even if driver was having a Fake licence, would not exonerate the Insurance Company as he was not negligent in driving, are certainly erroneous. Driving without licence or with a fake licence as driving a vehicle negligently are two different aspects of the matter. Holding a valid driving licence is a requirement of law, was being driven by a person holding a valid licence, but rashly and negligently, is a matter of evidence. The very fact which stood established that licence of driver Jagdish was a fake one, would completely exonerate Insurance Company.

6. In the light of the aforesaid we are of the considered opinion that the impugned judgment, insofar as it fastens the liability on the Appellant Insurance Company, cannot be upheld. The same is to be set aside. We accordingly do so."

(2) National Insurance Company Limited v. Geeta Bhat & Ors. AIR 2008 SC 1837, decision dated 31.03.2008 the Apex Court has held as under :

"6. Liability of an insurer to reimburse the insured, as an owner of

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the vehicle not only depends upon the terms and conditions laid down in the contract of insurance but also the provisions of the Motor Vehicles Act, 1988 (the Act). The owner of vehicle is statutorily obligated to obtain an insurance for the vehicle to cover the third party risk. A distinction has to be borne in mind in regard to a claim made by the insured in respect of damage of his vehicle or filed by the owner or any passenger of the vehicle as contradistinguished from a claim made by a third party.

7. An owner of the vehicle is bound to make reasonable enquiry as to whether the person who is authorized to drive the vehicle holds a licence or not. Such a licence not only must be an effective one but should also be a valid one. It should be issued for driving a category of vehicle as specified in the Motor Vehicles Act and/or Rules framed thereunder."

(3) Oriental Insurance Co. Ltd. V. Shri Nanjappan and others, 2004 (1) TN MAC 211 (SC) ; 2004 (2) CTC 464 (SC) : 2004 (1) ACC 524 (SC), which is incorporated as follows :

"For the purpose of recovering the compensation amount from the insured, the Insurer shall not be required to file a Suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the Insurer and the insured was the subject matter of determination before the tribunal and as if the issue is decided against the owner and in favour of the Insurer. A notice shall be issued to the insured to furnish security for the entire amount. The offending vehicle shall be attached as a part of the security. If necessary arises, the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured/owner of the vehicle shall make payment to the Insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property of the insured."

14. Ultimately learned Advocate Ms. Pathak submitted that the learned Tribunal at Surat has grossly erred in placing reliance on the ratio of Nirmala Kothari Vs. United India Insurance Co Ltd Civil Appeal No 1999 - 2000 ( Arising out of special leave petition no's 14739 - 14740 of 2018 ) as the

C/FA/2136/2020 JUDGMENT DATED: 29/10/2021

issue in the case in hand was altogether different. The licensing authority could not verify the license in the Nirmala Kothari's case however in the instant issue license was verified and which was found fabricated in the name of different individual. At the same time herein the present instance the Appellant insurance Company have produced license vide Exhibit 55 as which it is lucid that license was issued in the name of "ABHISHEK AGRAWAL" and not ANTAVARAV DADORAV BIRSHAVRAM.

15. She further submits that in alike such issues on the contrary if owner of vehicle appears before the trial proceedings of Tribunal, the Courts should ask for the collateral security from the Owner at the initial prima facie stage once the verification report is produced by Insurance Company so as to indemnify the Claimants. Thus in lieu of submissions she strongly contended that Insurance Company may be exonerated.

16. Per contra, learned Advocate, Mr. Nishit A. Bhalodi, appearing for the original claimant-opponent No.1 to 4 , herein has supported the judgment and award rendered by the Tribunal. It is urged that that Tribunal passed the impugned judgment and award, after taking into consideration the material, oral as well as the documentary, brought on record before it, and therefore, this Court may not interfere with the same. The learned advocate for the claimants submitted that the claimants are entitled to compensation and if the court comes to conclusion that the driver of the offending vehicle was holding fabricated license then Insurance company be directed to make the payment of the awarded amount to the claimants and recover the same from owner.

17. It is significant to mention driver is principle tortfeasor and owner is vicariously liable for the act driver then conjoint reading of section

C/FA/2136/2020 JUDGMENT DATED: 29/10/2021

3 read with section 5 of Act, driver having fake driving license has breached section 3 and owner not having verified its license breached section 5 of the Act. It is well settled that once the insurer establishes a willful breach of the terms of the policy on the part of insured, it shall have the right to recover the compensation paid to the victim/his legal representatives under statutory liability.

18. The Apex Court in case of Parminder Singh Vs. New India Assurance Co Ltd reported in (2019) 7 Supreme Court Cases 217, has held as below :

" 7. On the issue of liability to pay the compensation awarded, we affirm the view taken by the High Court that the Respondent - Insurance company is absolved of the liability to bear the compensation, as evidence has been produced from the office of the Regional Transport Office to prove that the drivers of the two offending trucks were driving on the basis of invalid driving licenses. It is also relevant to note that the owners and driver of the offending trucks have not appeared at any stage of the proceedings, including this Court.

7.1 This Court in Shamanna and Ors v. The Divisional Manager, The Oriental Insurance Co. Ltd and Others., held that if the driver of offending vehicle does not possess a valid driving license the principle of 'pay and recovery' can be ordered to direct the insurance company to the pay the victim, and then recover the amount from the owner of the offending vehicle."

19. After considering the submissions made on behalf of the appellant an assumption can be made that the licence possessed by the 5th respondent, Mr Antavarav Dadorav was a fake one. Only because the same was fake, the same, having regard to the settled legal position, as noticed hereinbefore, would not absolve the insurer to reimburse the amount awarded in favour of a third party by the Tribunal in exercise of its

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jurisdiction under Section 166 of the Motor Vehicles Act, 1988.

20. The interest of justice shall be subserved if the appellant is given rights of recovery from owner from the owner of the Truck (Respondent No. 6) since the appellant has deposited awarded amount as per the Stay Order. Resultantly, this appeal is partly allowed, the Insurance Company is exonerated to make payment of compensation, with a direction to recover the awarded amount along with interest from Owner of Truck i.e. Respondent No. 6 by filing execution petition against the Owner. The judgment and award passed by the Tribunal, in Motor Accident Claims Petition No. 473 of 2011 Surat, is partly modified and while holding the appellant-Insurance Company not liable to satisfy the claim.

21. First Appeal stands disposed of accordingly.

Order in Civil Application No. 1 of 2020 :

The Tribunal shall invest and disburse the amount as provided in the impugned judgment and award. Civil Application stands disposed of accordingly.

(NIKHIL S. KARIEL,J) BDSONGARA